1. 1 Kernochan Centre for Law, Media and the Arts Columbia Law School Collective Management of Copyright: Solution or Sacrifice? January 28, 2011 “Cross-Border Issues in Collective Management” Adriana Moscoso del Prado SGAE, Spain

2. THE “OFF-LINE” WORLD CISAC + BIEM RECIPROCAL REPRESENTATION AGREEMENTS - Territoriality of the license - National Scope

3. 33 THE “ON-LINE” WORLD 2000 CISAC World Congress / 2001 BIEM G. Assembly: “Santiago & Barcelona agreements - Territorial scope: Worldwide. - Licensed repertoire: the sum of the repertoires of the CMS. - Licensor: The CMS of licensees “economic residence”. - Most favorable nation clause (MFN). CMS communicated SA to the EC for validation

4. 44 EU.COMMISION REACTION Statement of Objections (2004): “Santiago agreements against Art 81 EU Treaty”: - Standardizes the RRA as regard their geographic authority to license - Absolute territorial national exclusivity for CMS - Eliminates competition between CMS - Reinforces national monopolies. - Prevents from offering different services. - Prevents the market from evolving in different directions - Affects trade between member states EU CMS Terminated the agreements Back to the “off-line” system

5. EU COMMISION REACTION Recommendation. May 18 2005 (DG MARKT) Right holders can: - Join any collecting society in Europe irrespectively of the economic residence of the right holder or the society. - Select the territorial scope of a rights management mandate. - Determine the online rights to be entrusted for collective management. - Transfer multi territorial management of rights to another CRM

6. EU COMMISION REACTION Impact Assessment. 11.10.2005: 3 options for cross border collective management of online music services: 1) Do nothing 2) Eliminate territorial restrictions and customer allocation provisions in RRA (simulcasting) 3) Give right-holders the additional choice to appoint a collective rights manager for the online use of the musical works across the entire EU.

7. EU COMMISION REACTION DG COMP. CISAC Decision. 16 JULY 2008 - 2000 Complaint filed by RTL and Music Choice. - RRA restrict competition by limiting the ability of CRM to offer their services to authors and commercial users outside their domestic territories.

8. IIMPACT Several multi-national music publishers have withdrawn online rights for collective management. EU CRM have renegotiated their RRA (no membership clause, no exclusivity clause, no standardized territorial clause) All author´s rights are no longer evidently available from collective management societies Collecting societies compete with each other for repertoires and also territories (except their own)

9. Pan-European single-repertoire licensors 27 multi-repertoire domestic licensors 9 EU CROSS BORDER LICENSING THE NEW LICENSING MAP IN EUROPE CELAS EMI+GEMA+PRS PAECOL SONY+GEMA DEAL UNIVERSAL+SACEM LICENSEE NCMS LATIN ONE STOP SHOP SGAE WARNER PEDL

10. From a fragmented territory to a fragmented repertoire. Licensing not easier for users (+ 30 licensors): - More transactional costs - More legal uncertainty - Barriers to entry for new businesses Clearing of rights much more complex for CRM Risk for cultural diversity Market: piracy and barriers to growth 10 THE CONSEQUENCES

11. SOME DATA IFPI RECORDING INDUSTRY IN NUMBERS 2010 Digital sales as percentage of trade value

12. SOME DATA IFPI DIGITAL MUSIC REPORT 2011 1/4 internet users in EU visit unlicensed sites monthly. SPAIN:  45% of active internet users visiting unlicensed services  No new artists in the top sales lists in Spain, since 2008  No Spanish artists in the top sales lists in EU since 2007.  The market is about one third of its level in 2001.  First semester of 2010. Online piracy rate: MUSIC: 97,8% FILM: 77,1% VIDEOGAMES: 60,7% BOOKS: 35,1%

13. ? HOW DO WE SOLVE THIS MESS?

14. From the market The creation of “Hubs”: ARMONIA, ICE... The creation of a Pan European Portal (CISAC) The directive satellite model (EBU proposal) From the regulator GRD (Global Repertoire Database). EU Digital Agenda Collective Management Directive. DGMARKT (passport model) 14 SOME ANSWERS

15. EU CROSS BORDER LICENSING What´s ahead of us? 15